ADRN

The KF Korea Workshop is hosted by the Korea Foundation(KF) and organized by the East Asia Institute(EAI) to promote and share understanding of Korean social, political and economic issues among international residents in Korea.

For the fifth lecture of 2019 KF Korea Workshop 2, Professor Joon-Ho Hahm of Yonsei University spoke about “Korean Economy: Present and Future” under the theme of [Korean Economy]

Professor Hahm began the lecture by explaining Korea’s developmental history from a war-torn country to an industrialized powerhouse and the world’s twelfth largest economy. He noted that Korea has achieved two development “firsts.” One, it is the first country without a history of colonialism to join the so-called “30-50 Club” of countries with more than fifty million population and per capita GNI over 30,000 USD. Second, it is the first former recipient of official development assistance (ODA) that has transitioned into becoming a donor. The Korean economy has moved through three stages, beginning with a largely labor-driven economy in the 1960s, through the investment-driven growth during the 1970s and 80s, and transitioning into an innovation-driven economy while simultaneously becoming a full democracy during the 1990s.

Korea’s current economy is more dependent on exports than ever before, mainly focusing on high value-added sectors like heavy and chemical industries, transport equipment, and electronic equipment. Korea’s high reliance on exports makes it exposed to global trade risks, such as the current US-China trade war which will impact the growth of the export sector in 2019, especially because of its impact on the global IT sector. 

Professor Hahm identified Korea’s aging society as the greatest long-term risk to the Korean economy. Drawing comparisons with the experience of the Japanese economy two decades earlier, the professor showed how Korea’s population growth will be negative from 2030, and the high dependency ratio may begin to affect the Korean economy negatively as early as 2026.